Cloud Wars: Microsoft Azure vs Amazon AWS

This is an essay written as a part of a job interview process. Google App Engine doesn't exist for the purpose of this post

The war between AWS and Azure is happening on multiple fronts, including features, prices, capacity, end users, etc... I will review just a few aspects of this battle.

AWS has been very strong in attracting startups to its platform, Netflix and Instagram arguably the most well-known examples. AWS has become synonymous to "Cloud" for most entrepreneurs and startup developers. There are clear benefits for startups to use any cloud, but I’d argue that AWS cannot be widely successful by serving startup customers only. Success rate of startups is very low and most of them will die killing corresponding Amazon revenues. On the flip side, widely successful startups might not be paying Amazon (or any cloud) indefinitely, they will likely invest into their own datacenter(s).

Azure tries to engage the same startup demographic, offering free Microsoft products and free Azure resources to startups, but it’s an underdog when it comes to new products being exclusively built on Azure. On the flip side, Azure has better positioning in the enterprise market than AWS. Enterprises will not be as quick to adopt any new technologies, but eventually they will do it with enormous scale and longevity. Microsoft knows this market, has a lot of information on what it’s enterprise customers are buying and can capture a huge chunk of enterprise cloud spend in the next few years. Office 365 is a great example of how Microsoft leveraged its position in Enterprise Email and created a highly successful and growing cloud business based on this model.

To guess who will win the cloud war in mid and long term in the light of this essay is to guess whether there will be enough cloud business from successful startups compared to enterprises. I believe Microsoft has a better chance to win the cloud war against Amazon, especially with their recent focus on cloud and strong positioning in enterprise.